The Fannie Mae Home Purchase Sentiment Index® dipped 1.5 points in April to 88.3, dropping after March's 5.5-point jump, and down 3.5 points from the same time last year. The number of Americans who say it is a good time to buy a home decreased 8 percentage points to 14 percent, which helped drive the index lower, even after another supportive mortgage rate outlook from consumers. The net share of respondents expecting mortgage rates to go down over the next 12 months has risen a total of 12 percentage points over March and April.
"Households remain upbeat about economic activity but have more mixed attitudes toward the housing market," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "While home selling confidence remains strong and more consumers on net expect mortgage rates to decline over the next year, respondents walked back some of their buying optimism from March.
Improving perceptions of income gains and a softening home price growth outlook should help support housing demand. However, increasing expectations among consumers that mortgage rates will continue to be favorable for some time will likely gain additional support following last week's Fed meeting – and may also be reducing their urgency to buy."
Fannie Mae's 2019 Home Purchase Sentiment Index revealed that fewer people think it's a good time to buy a home, but the net share of those who say it is a good time to sell a home remained unchanged at 43%. This component is down 2 percentage points from the same time last year.
The Home Purchase Sentiment Index (HPSI) distills information about consumers' home purchase sentiment from Fannie Mae's National Housing Survey® (NHS) into a single number. The HPSI reflects consumers' current views and forward-looking expectations of housing market conditions and complements existing data sources to inform housing-related analysis and decision making.
The HPSI is constructed from answers to six NHS questions that solicit consumers' evaluations of housing market conditions and address topics that are related to their home purchase decisions. The questions ask consumers whether they think that it is a good or bad time to buy or to sell a house, what direction they expect home prices and mortgage interest rates to move, how concerned they are about losing their jobs, and whether their incomes are higher than they were a year earlier.
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